“The good news for 2015 is that the U.S. economy appears well poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better,” Frank Nothaft, vice president and chief economist at Freddie Mac, said in a statement accompanying the November report.

“There are several reasons for the better macroeconomic performance,” Nothaft said. “Governmental fiscal drag has turned into fiscal stimulus, lower energy costs support consumer spending and business investment, further easing of credit conditions for business and real estate lending support commerce and development, and more upbeat consumer and business confidence, all of which portend faster economic growth in 2015.

“And with that,” he said, “the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity.”

The national outlook bodes well for the Bay Area, where the economy is already running strong. Continued regional growth, supported by a healthy U.S. economy, will keep Bay Area residents working, homebuyers in the market, and sellers eager to trade up to higher-priced properties.

Economists at Freddie Mac made the following projections for U.S. housing in 2015:

MORTGAGE RATES: Interest rates will likely be on the rise next year. In recent weeks, the 30-year, fixed-rate mortgage has dipped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.

HOME PRICES: By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015.

HOUSING STARTS: Homebuilding is expected to ramp up in the new year, projected to rise 20 percent from this year. That will likely help total home sales to climb by an estimated 5 percent, reaching the best sales pace in eight years.

SINGLE-FAMILY HOMES: Mortgages for single-family homes have been falling in 2014, but not entirely because of tighter lending policies. Refinancing volume dropped steeply in 2014 and is expected to slip an additional 8 percent in the year ahead. Refinancings are expected to make up only 23 percent of mortgages in 2015; they had accounted for more than half in recent years.

MULTIFAMILY HOMES: Mortgages for apartments and other multifamily housing have surged 60 percent between 2011 and 2014 and are expected to continue rising in 2015.

]]>http://blog.pacificunion.com/2015-freddie-mac-forecast/feed/0Housing is Key to Happiness, and U.S. Ranks Highhttp://blog.pacificunion.com/housing-is-key-to-happiness-us-ranks-high/
http://blog.pacificunion.com/housing-is-key-to-happiness-us-ranks-high/#commentsFri, 15 Aug 2014 15:01:37 +0000http://blog.pacunion.com/?p=23051Americans are quite happy with their current housing situation, with 86 percent saying they are satisfied, according to a worldwide survey by Paris-based Organization for Economic Cooperation and Development.

Even so, Americans’ satisfaction with their housing is 1 percent less than OECD’s world average of 87 percent. Nations where residents ranked themselves more satisfied included Germany, Ireland, Spain, and Belgium.

Overall, the United States placed first among 180 countries for housing conditions on OECD’s Better Life Index.

The organization found that Americans spend a bit less of their income on housing — only 19 percent compared with the 21 percent OECD average — and the facilities are, on average, much nicer, with 99.9 percent of people in the United States living in dwellings with private access to an indoor flushing toilet.

The Better Life Index, which tracks a variety of factors that help determine a country’s overall happiness, places a great deal of importance on housing.

“Living in satisfactory housing conditions is one of the most important aspects of people’s lives,” OECD concluded. “Housing is essential to meet basic needs, such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home.”

The Better Life Index puts a global perspective on life in the United States. Another recent survey looked closer and found that people in the Bay Area are happier and more contented with their lives than residents of any other large U.S. metropolitan area.

The San Jose-Sunnyvale metro area ranked No. 1 for high well-being among its residents, according to Gallup Inc.’s “State of American Well-Being” report, and the San Francisco-Oakland metro area ranked No. 2.

]]>http://blog.pacificunion.com/housing-is-key-to-happiness-us-ranks-high/feed/1HUD Report Tracks Bay Area Housing Recoveryhttp://blog.pacificunion.com/hud-report-tracks-bay-area-housing-recovery/
http://blog.pacificunion.com/hud-report-tracks-bay-area-housing-recovery/#respondThu, 13 Feb 2014 16:01:34 +0000http://blog.pacunion.com/?p=19903The recession of 2007-2009 hit the Bay Area harder than the nation as a whole, but the region recovered faster and today outperforms the country in terms of economic growth and housing market conditions. In fact, Bay Area job growth is running 40 percent ahead of the national average, while the risk of foreclosing on a home here is lower than in 95 percent of the nation’s metropolitan areas.

This portrait of a robust Bay Area economy was included in a pair of reports released this week by the U.S. Department of Housing and Urban Development.

HUD’s monthly Housing Scorecard offers a snapshot of residential real estate conditions nationwide. A separate “Spotlight” feature takes a closer look each month at one of the nation’s 381 metropolitan areas, with the latest focused on the San Francisco metro region, a federally designated area that includes five Bay Area counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.

Overall, the U.S. housing market “continues to make slow but steadily improving progress,” the latest Housing Scorecard noted. Home sales in 2013 showed their strongest performance in years, foreclosure starts reached their lowest annual level since 2005, and homeowners’ equity rose $3.4 trillion since the beginning of 2012.

Meanwhile, “as the housing market continues to improve nationwide, the San Francisco metropolitan area is also showing signs of significant improvement,” Kurt Usowski, HUD deputy assistant secretary for economic affairs, said in a statement accompanying the report.

The recession hit the San Francisco metro area especially hard, the Spotlight report noted, but the recovery was stronger, too. Employment grew at an average annual rate of 2.1 percent from the second quarter of 2010 through the third quarter of 2013, compared with an increase of 1.5 percent across the country. Job growth was especially strong in the construction, leisure and hospitality, and professional- and business-services sectors.

Home sales in the San Francisco region are improving at a fast pace, while mortgages at risk of foreclosure dropped 51 percent during the past year.

Citing data from LPS Applied Analytics, the HUD report said the San Francisco metro area placed 361st out of 381 metropolitan areas ranked by share of mortgages at risk of foreclosure.

Looking closer, the HUD said the share of mortgages that remain underwater dropped to 2.5 percent in the combined San Francisco-San Mateo County region by the third quarter of 2013, down from 9.0 percent a year earlier. In the Alameda-Contra Costa County region, negative equity declined to 13.9 percent from 29.7 percent over the same period.

The report noted that the Alameda-Contra Costa region fared less well than the rest of the metro area. During the housing bubble, home price appreciation there peaked earlier and rose higher than the metro area as a whole, but the subsequent decline in prices was greater for Alameda-Contra Costa (45 percent) than for the larger San Francisco metro area (22 percent) and the entire nation (30 percent).

Overall, federal mortgage-assistance programs helped more than 73,000 homeowners in the San Francisco metro area between April 2009 and December 2013, the HUD said.

]]>http://blog.pacificunion.com/hud-report-tracks-bay-area-housing-recovery/feed/0Forecast: Job Growth, Home Sales Will Continue Expanding in 2014 and Beyondhttp://blog.pacificunion.com/job-growth-home-sales-expand-2014-beyond/
http://blog.pacificunion.com/job-growth-home-sales-expand-2014-beyond/#respondThu, 21 Nov 2013 16:01:49 +0000http://blog.pacunion.com/?p=18415Housing markets are taking a “fall breather,” according to a respected real estate research firm, but activity will pick up again soon, and analysts are predicting “a solid market in 2014 and beyond.”

A just-released monthly report by John Burns Real Estate Consulting says homebuyers have paused after a busy summer of rising prices and frenetic sales activity. Adding to the slowdown, consumer confidence declined in October amid concerns about the government shutdown and the U.S. debt limit.

But economic indicators point to “measured growth” in real estate activity in the years ahead, according to the Burns report, which based its forecast on a review of 153 recent economic surveys, metrics, and reports. Among the company’s findings:

Even with a relatively weak recovery, the U.S. economy is expected to add 10 million jobs from 2013 through 2016.

]]>http://blog.pacificunion.com/job-growth-home-sales-expand-2014-beyond/feed/0Housing Affordability Down in Bay Area, California as Prices Continue Risinghttp://blog.pacificunion.com/housing-affordability-down-in-bay-area-california/
http://blog.pacificunion.com/housing-affordability-down-in-bay-area-california/#respondTue, 19 Nov 2013 16:01:50 +0000http://blog.pacunion.com/?p=18361Rising prices pushed Bay Area homes even further out of reach for most buyers in the third quarter, with barely one in five able to afford a median-priced home.

The Bay Area remains the least affordable region in California for homebuyers, according to a recent survey from the California Association of Realtors, although all regions reported drop-offs in housing affordability.

San Mateo was the least affordable county in the state in the third quarter, with only 15 percent of its residents able to buy a median-priced, existing single-family home there.

Together, Bay Area housing affordability fell to 21 percent in the third quarter, down from 24 percent in the previous quarter and 35 percent a year earlier.

Homebuyers in the Bay Area needed to earn a minimum annual income of $144,870 to qualify for the purchase of a $704,990 median-priced home in the third quarter. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,620, assuming a 20 percent down payment and an interest rate of 4.36 percent.

Statewide, the percentage of homebuyers who could afford to buy a median-priced home fell to 32 percent in the third quarter, down from 36 percent in the second quarter and 49 percent a year earlier.

Affordability levels in California have been falling since they peaked at 56 percent in the first quarter of 2012. That was just before the housing recovery took hold and prices started rising.

Even as affordability continues to slide, however, far more Californians are able to purchase a home today than six years ago. Affordability fell to a record low of 11 percent in the second quarter of 2007, just before the housing industry collapse and nationwide recession.

]]>http://blog.pacificunion.com/housing-affordability-down-in-bay-area-california/feed/0California Realtors Forecast Healthy Growth in 2014http://blog.pacificunion.com/california-realtors-forecast-healthy-growth/
http://blog.pacificunion.com/california-realtors-forecast-healthy-growth/#respondTue, 15 Oct 2013 15:01:12 +0000http://blog.pacunion.com/?p=17707A report from the California Association of Realtors offers new hope for first-time and trade-up homebuyers, forecasting healthy growth in real estate markets across the state in 2014 and predicting that fewer investors and a greater supply of homes for sale will open the field to a wider range of buyers.

The association also expects the median sales price to rise an average 6 percent after a projected 28 percent jump in 2013.

“The housing market has improved over the past year, and we expect this trend to continue into 2014,” said CAR President Don Faught, in a statement accompanying the 2014 forecast.

“As the economy enters the fourth year of a modest recovery, we expect to see a strong demand for homeownership, as buyers who may have been competing with investors and facing an extreme shortage of available housing return from the sidelines,” continued Faught.

The Housing Market Forecast matches other reports we’ve seen recently at Pacific Union, which predict more-normal real estate activity in the Bay Area in the coming year.

The average interest rate for a 30-year, fixed-rate mortgage is forecast to rise to 5.3 percent but will still remain at historically low levels.

“We’ve seen a marked improvement in housing market conditions in a year with the distressed market shrinking from one in three sales a year ago to less than one in five in recent months, thanks primarily to sharp gains in home prices,” said Leslie Appleton-Young, CAR chief economist. “As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014. As a result of these factors, we’ll see home price increases moderate from the double-digit increases we saw for much of this year to mid-single digits in most of the state.

“The wildcards for 2014 include federal, fiscal, monetary and housing policies – such as the mortgage interest deduction and mortgage finance reform – as well as housing supply and the actions of the Federal Reserve, which will ensure a higher rate environment.”

]]>http://blog.pacificunion.com/california-realtors-forecast-healthy-growth/feed/0Bright Forecasts for Real Estate Marketshttp://blog.pacificunion.com/bright-forecasts-for-real-estate-markets/
http://blog.pacificunion.com/bright-forecasts-for-real-estate-markets/#respondTue, 08 Oct 2013 15:01:23 +0000http://blog.pacunion.com/?p=17570Look for U.S. housing markets to continue expanding at healthy levels next year, with the pace of sales-price appreciation to slow down and construction of new homes to pick up.

And those whispers of a coming “bubble” in San Francisco real estate? At least one report thinks it’s not going to happen.

Two housing forecasts released within the past week offer new optimism for homebuyers and sellers in 2014 and beyond.

Last Wednesday, an analyst at predictive software company Veros forecast that price-appreciation rates will start to cool in 2014. That will keep prices affordable, particularly in the nation’s healthiest real estate markets.

Price growth will gradually slow to approximately 5 percent, according to the company’s computer models, fending off fears of a sustained bubble in price growth.

Meanwhile, a report from the National Association of Home Builders on Thursday announced that the ongoing housing recovery is “expected to gain momentum next year even as several challenges remain.”

NAHB Chief Economist David Crowe said in the report that “The cards are in play for a decent and fairly strong recovery in 2014 and particularly in 2015.”

Homebuilders predict that construction of single-family homes will rise 17 percent in 2013 and jump an additional 31 percent next year. The NAHB echoed the conclusions of the Veros forecast, predicting that the growing availability of homes will help slow price increases in 2014 and beyond.

Another bright spot, according to the NAHB, is a rise in household formations that were delayed during the economic downturn, as college graduates and young professionals were forced to move back in with their parents or double up as roommates. The United States was producing 1.4 million additional households every year at the height of the housing boom, but that figure plunged to 500,000 during the depth of the recession. Today, that number is back up to 700,000.

]]>http://blog.pacificunion.com/bright-forecasts-for-real-estate-markets/feed/0Bay Area Ranks High Among US Housing-Recovery Leadershttp://blog.pacificunion.com/bay-area-ranks-high-in-housing-recovery/
http://blog.pacificunion.com/bay-area-ranks-high-in-housing-recovery/#respondTue, 27 Aug 2013 15:01:48 +0000http://blog.pacunion.com/?p=16882Two Bay Area regions rank among the top five leading the U.S. housing recovery, outperforming most of the nation in decreased foreclosure activity, growing median price, fewer underwater homes, and rising employment.

“The U.S. housing market has clearly shifted to recovery mode over the past 18 months, with home prices consistently rising and foreclosures falling closer to pre-housing bubble levels,” said RealtyTrac Vice President Daren Blomquist, in a statement.

“Still, symptoms of the distress that plagued the housing market over the past seven years continue to linger, particularly in the form of a high percentage of underwater borrowers and distressed sales,” Blomquist said. “This lingering distress is creating an uneven pace of recovery across different local markets.”

Recent foreclosure activity in the region fell 88 percent from its peak, according to RealtyTrac, compared with the U.S. average of 65 percent. The median home price here rose 96 percent from its low point, compared with 19 percent nationwide.

Underwater homes in the Bay Area accounted for 17 percent of all homes with mortgages, compared with 26 percent nationwide, and the unemployment rate here was 6.5 percent, compared with the 7.6 percent U.S. average.

The Bay Area was closer to the national average in three other factors used in the report: distressed sales as percent of total sales (22 percent in the Bay Are and 23 percent nationwide), institutional investors’ share of total sales (5 percent versus 9 percent), and cash purchase share of total sales (24 percent versus 30 percent).

]]>http://blog.pacificunion.com/bay-area-ranks-high-in-housing-recovery/feed/0Real Estate Roundup: Competition for Homes Is Most Fierce in San Franciscohttp://blog.pacificunion.com/real-estate-roundup-competition-for-homes-most-fierce-in-san-francisco/
http://blog.pacificunion.com/real-estate-roundup-competition-for-homes-most-fierce-in-san-francisco/#respondMon, 17 Jun 2013 15:01:21 +0000http://blog.pacunion.com/?p=15234Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

S.F. MOST COMPETITIVE MARKET IN U.S.
The San Francisco metropolitan area is the most competitive real estate market in the nation, with 87.9 percent of all offers on homes facing competition from other buyers, according to a new report from online real estate aggregator Redfin.

Nearly 97 percent of home sales were at prices above their asking prices — an average of 9.7 percent.

Those numbers are far above the average of 21 major metro markets, where 69.5 percent of offers face competition and 49 percent of sales topped their asking prices by an average of 1.4 percent.

But in a sign that the bidding frenzy may have finally peaked, San Francisco’s 87.9 percent of multiple bids is down from a high of 90.8 percent in April. (It eased off nationally too, down from 73.3 percent.)

The share of respondents who say now is a good time to sell a home reached a record high of 40 percent, up from 30 percent in April and 16 percent a year earlier. At the same time, the share of those who say it is a good time to buy a home rose 5 percentage points from April to a survey high of 76 percent.

Fannie Mae attributed the rising optimism to reports of strong home price gains.

“Sentiment toward selling a home appears to be catching up with the strengthening housing market,” Doug Duncan, Fannie Mae’s chief economist, said in a statement. “The share of consumers who think it’s a good time to sell a home spiked this month, the largest increase in the survey’s three-year history. This jump may foreshadow a gradual return to more normal levels of housing supply from their lows of recent months.”

HOUSING FORECAST: ‘LONG-TERM IMPROVEMENT’
In another report, economists at Fannie Mae said the housing market remains one of the brightest spots in the U.S. economy.

“Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels,” the agency reported in a mid-year economic forecast. “Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.”

Overall, Fannie Mae said 2013 would see “sustainable but below-par growth as the economy begins its transition to more normal levels,” with “2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012.”

UNDERWATER HOMES RECEDING
Rising home prices helped carry another 850,000 underwater homes back into positive equity in the first quarter of 2013. That brings the total of borrowers who have regained positive equity in the past year to 1.7 million.

Figures from the research firm CoreLogic show that 19.8 percent of all homes with a mortgage remained underwater at the end of the quarter, down from 21.7 percent at the end of 2012. In California, 21.3 percent percent of homes were underwater in the most recent quarter.

“The negative equity burden continues to recede across the country thanks largely to rising home prices,” said Anand Nallathambi, CoreLogic’s president and CEO. “The recovery is still far below peak home price levels, but tight supplies in many areas coupled with continued demand for single family homes should help close the gap.”

LOAN STANDARDS A ROADBLOCK
Ninety percent of renters who aspire to owning a home say they expect to achieve that goal someday, although many say today’s stringent home loan standards stand in their way.

Those facts came from Fannie Mae’s latest National Housing Survey, which found that 42 percent of renters who expect to buy believe that they will not be able to do so for at least five years.

According to the survey, tenants believe home ownership is better than renting for privacy, security, and raising a family.

Fifty-one percent of renters say owning makes more sense than renting when comparing financial and lifestyle benefits. Younger renters aged 18 to 34 are nearly twice as likely to say their main reason for renting is to prepare financially for future ownership, compared with renters age 35 and up.

The Fed said the net worth of American households is now higher than before the recession began more than five years ago, without adjusting for inflation. Household net worth climbed 4.5 percent in the first quarter of 2013, reaching $70.3 trillion, compared with $68.1 trillion in 2007.

For the first quarter of 2013, real estate holdings accounted for a $784 billion increase in household net worth, according to the Fed. Corporate shares and mutual funds were responsible for a gain of nearly $1.5 trillion.

BIGGEST GAIN IN HOME PRICES IN 7 YEARS
Here’s more evidence of the housing market’s remarkable — and sustained — recovery: In a new report, the research firm CoreLogic says U.S. home prices in April surged 12.1 percent from a year earlier for the biggest year-over-year price gain in more than seven years.

In California home prices rose 19.4 percent in a year’s time. Only Nevada posted a bigger gain: 24.6 percent.

May numbers aren’t available yet, but CoreLogic forecasts a 12.5 percent annual jump in home prices for the month and said the trend is likely to continue.

“The pace of the housing market recovery quickened in April as home prices rose across the U.S.,” said Anand Nallathambi, president and CEO of CoreLogic. “For the second consecutive month, all 50 states registered year-over-year home price gains excluding sales of distressed homes. We expect this trend to continue, bolstered by tight supplies and pent up buyer demand.”

SHORT SALES DIFFERENT FROM FORECLOSURES
The credit reporting industry has long frustrated homeowners who sell their properties in short sales. That’s because the industry considers a short sale to be the equivalent of a foreclosure, thereby compounding damage to a seller’s credit report.

But Inman News columnist Ken Harney says the trade association representing the big three credit reporting agencies — Equifax, Experian, and TransUnion — will soon roll out a new credit code for short sales, finally separating them from foreclosures. The change, Harney says, “could help short sellers requalify for new mortgages much sooner than the four to seven years sometimes required after a foreclosure today.”